Monthly Update on the Diamond Market

Welcome to our regular monthly column dedicated to updates on the diamond market. In this section, we will analyze the key trends and the most significant events that marked the month of October. The information presented comes from reliable sources such as Rapaport News, IDEX, and Il Sole 24 Ore.

Overview of the Market

In October 2024, the diamond market showed signs of stabilization, although prices remained generally low. The demand for natural diamonds saw a slight uptick, particularly for round, pear, and oval diamonds in the 2-3 carat range, with quality grades D-I and VS2-SI2, showing no visible inclusions.

For "fancy" diamonds, which feature unique shapes or colors, the price decline was less pronounced compared to previous months. The temporary suspension of production in India during the Diwali festivities reduced market supply, contributing to a modest price rebound and creating a climate of cautious optimism.

The RapNet Diamond Index (RAPI™) showed slight price variations: diamonds of 0.30 and 3 carats saw decreases of 0.57% and 0.47% month-over-month, respectively, while 1-carat and 0.50-carat diamonds saw declines of 1.53% and 2.10%, respectively.

Additionally, the 20% year-over-year decline in rough diamond imports into India also helped to slightly stabilize prices in the market.

Key Events of October 2024

Trends in Round and Fancy Diamonds: In October, round diamonds in the 2 to 4.99-carat range experienced moderate demand, with higher-value cuts showing a slight rebound, in contrast to stones under 0.5 carats, which saw the most significant price declines. In fancy diamonds, pear and oval cuts exhibited greater stability, with certain weight categories (such as 3 to 3.99 carats) seeing slight price increases.
Pressure on Producers: The pressure on producers continues, and despite the temporary halt in Indian production for Diwali, they were forced to offer significant discounts. With the holiday season approaching, an increase in demand from Western markets is expected, but the resumption of production in India in November could lead to an oversupply, keeping pressure on prices.
Technological Innovations for Traceability: De Beers has announced the introduction of origin traceability for rough diamonds over 1.25 carats through the Tracr platform, aiming to enhance transparency and increase consumer trust.
Changes in European Markets: In Europe, demand remained stable, with a slight increase in interest in Italy and France for diamonds with origin traceability, following the recent launch of De Beers' Tracr platform.

These events outline a dynamic October for the diamond market, characterized by geopolitical challenges, technological innovations, and shifts in global demand.

Some curiosity from the world of diamonds

Diamond dust to counteract global warming

Recently, a team of scientists from Harvard University explored the innovative idea of using diamond nanoparticles to combat climate change. This proposal, originally stemming from a study led by Professor David Keith, involves injecting tiny diamond particles into the stratosphere to reflect solar radiation, thereby reducing global warming. Scientists believe that diamond nanoparticles could be more effective and stable compared to other materials previously proposed, such as aluminum oxide. However, this strategy raises concerns about high costs and potential environmental effects, requiring further research to assess its feasibility.

The Sale of the Aga Khan's Emerald

On November 12, 2024, the Christie's auction house in Geneva will put the famous Aga Khan emerald up for auction. This 37-carat Colombian gem is set in a platinum and gold brooch crafted by Cartier. Commissioned in 1960 by Prince Sadruddin Aga Khan as a gift for his wife, Nina Dyer, the brooch was first sold in 1969 for 580,000 Swiss francs (approximately 135,000 dollars at the time). Today, it is estimated to fetch a price between 6 and 8 million dollars.

Insight of the Month

Greenwashing in the Luxury Goods and Diamond Industry

In recent years, the phenomenon of "greenwashing" has attracted the attention of consumers and legislative authorities in many countries. The term refers to deceptive practices by some companies that promote an image of environmental responsibility without a genuine commitment to sustainability. In response to the growing consumer sensitivity towards ecology, many businesses in the luxury goods and diamond sectors have started making "green" promises that do not always reflect reality.

Examples of Greenwashing in the Luxury Goods Sector

Several brands have already attracted attention for alleged greenwashing practices. For example:

"Sustainable Diamonds": Some high-end jewelry companies promote synthetic diamonds as an eco-friendly alternative to natural diamonds. However, not all synthetic diamonds are produced using renewable energy. In fact, production processes often require large amounts of energy and contribute to greenhouse gas emissions. The term "carbon neutral," frequently used by synthetic diamond producers such as Pandora and some smaller brands, can also be misleading. In many cases, companies offset their emissions by purchasing carbon credits without making actual changes to their production processes.
"Recycled" Materials in Jewelry: Major luxury brands like Tiffany & Co. and Cartier claim to use recycled metals to reduce their environmental impact. However, only a small percentage of the metal used is actually recycled, while most comes from mines, which in many cases have a significant impact on ecosystems. This misleading practice leads consumers to believe that the jewelry is entirely made from eco-friendly materials.
"Zero Conflict" Claims: Diamonds labeled as coming from conflict-free zones are often referred to as "ethical." However, this certification does not always guarantee that labor conditions align with human rights standards. Brands such as De Beers and other industry players that adhere to the Kimberley Process (a certification system aimed at preventing the trade of conflict diamonds) have been criticized for failing to address issues such as worker exploitation and unsafe working conditions.

The Importance of Transparency and Change

Given the growing consumer focus on sustainability, it is essential for companies in the sector to adopt genuinely eco-friendly and transparent practices, avoiding deceptive and misleading statements.

The European Union Directive No. 2024/825, published on March 6, 2024, aims to empower consumers in the green transition by improving protection against unfair practices and enhancing information. This new anti-greenwashing law represents an important step, as it encourages companies in the diamond and luxury sectors to improve transparency and invest in more sustainable production methods.

Towards a More Sustainable Future

The luxury goods sector, known for its high environmental impact, has the potential to positively influence the global market. Luxury brands, followed and imitated worldwide, can set higher standards by investing in innovative and truly sustainable solutions. In this context, consumers play a crucial role: by choosing brands that demonstrate a genuine commitment to sustainability, they reward transparency and help transform the market.

Conclusions

The diamond market is undergoing a significant transformation, influenced by global economic dynamics, evolving consumer preferences, and new regulations. The growing environmental awareness and the introduction of stricter laws against greenwashing are prompting companies in the sector to reassess their practices and promote greater transparency. For consumers, this represents an opportunity to make more informed and sustainable choices, contributing to a future where luxury and environmental responsibility can coexist harmoniously.

Stay tuned for more updates and insights into the fascinating world of diamonds!